Daily Dose of iQ: Shopkick is Like Foursquare, Only Better

Jan 31, 2012 — Nancy Yu Wen Sun

Shopkick, a location-based consumer app that helps retailers improve foot traffic and engagement, generated over $110 million in revenue for partners in 2011, reported Ryan Kim of Gigaom.com. Partners include Macy's, Target, Sports Authority, American Eagle Outfitters, Best Buy, Toys "R" Us, Crate & Barrel and more.

Shopkick is like Foursquare for customer loyalty programs, but better -- users get rewards. Customers get rewards for visiting stores or interacting with products. These rewards can be redeemed for deals. Users are not tied down to one reward card per store type. Thus, even if you are buying a baby toy once in a blue moon for a friend, you will still be able to save reward points in the system and use them at other participating stores.

Shopkick provides a retail experience that is not driven by the lowest price offering. It provides retailers with way to capture loyal customers with incentives -- and unlike things like Air Miles, you can accumulate points just by stopping in the store. You don't necessarily have to buy anything. Shopkick helps combat the lure of in-store price comparison apps that have been causing retailers grief of late (see Amazon). It also notifies store staff when Shopkick users are in store, allowing salespeople to offer personalized service.

Shopkick lets consumers ditch their stack of loyalty cards for different merchants. Even with all the branded store apps in your phone, you may forget to use them when you're in a given store. Shopkick seems to condense various applications into one and reward points across multiple stores, making shoppers' lives easier. Privacy could be an issue, though, as you wouldn't want your shopping record at Victoria's Secret shared with Toys "R" Us. Other than technical questions like those, most people would likely use it for its benefits of efficiency and savings.

Shopkick was at NRF 2012. I attended at presentation called "Has Mobile Marketing Revolutionized Shopper Engagement?" at the NRF Retail's BIG Show a couple weeks ago, hosted by Doug Galen, Chief Revenue Officer at Shopkick, among other experts. The take-home message from the talk: Retailers must engage with customers via mobile apps. The panel believes the future of shopper engagement is through mobile marketing, but depends on the following elements: free Wi-Fi, partner companies, and rewards.

The Wi-Fi requirement was interesting: When users are connected to the Internet all the time, they are more likely to use shopping apps for rewards and reviews. 

Partner companies are important to create a unified ecosystem so that customers get in the habit of seeking out participating merchants -- just like Air Miles programs. Amid the myriad of shopping apps, the more partnerships Shopkick can make with major retailers, the better. When users engage with Shopkick, the shopping experience at participating stores is more personalized, they get rewards and they have a better experience. As a result, they're more likely to come back.

Meanwhile, the store can record customer visitsand build more personalized marketing campaigns, right from the start of the shopping experience. With Shopkick as the point of entry, stores and companies can better engage with their consumers and push mobile marketing to more relevant target groups. 

And so, three questions remain: Can Shopkick get enough partners to create the ecosystem it needs to achieve mainstream adoption? Can partners offer the rewards and the shopping experiences compelling enough for customers to use Shopick? Will malls and stores offer free, universal Wi-Fi? Stay tuned.

Topics: Retail Operations, Wireless Trends, Mobile Industry, Macy's, Customer Experience

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